A Partnership Began Its First Year of Operations with the Following

question 31

Multiple Choice

A partnership began its first year of operations with the following capital balances:

The Articles of Partnership stipulated that profits and losses be assigned in the following manner:
Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.
Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.
The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.
Each partner withdrew $13,000 per year.
Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.
What was Thurman's total share of net income for the second year?

• A) $17,160 income.
• B) $4,160 income.
• C) $19,760 income.
• D) $17,290 income.
• E) $28,080 income.

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Definitions:

Low-Income Countries

Nations with a gross national income per capita below a certain level, characterized by limited industrial development and low human development indicators.

Women's Status

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Dependency Theory

A perspective in international relations and economic development that examines how developed nations perpetuate the underdevelopment of developing nations through a dependence on the global capitalist system.

Former Colonies

Territories that were once governed and exploited by a foreign power but have since gained independence.